With just a few days left in 2016 chances are you’re getting a lot of asks for year-end charitable giving. Your mailboxes, both at home and online, are probably packed with compelling requests from many worthy causes in desperate need of your financial support. As a generous person you are likely in the habit of giving a great deal of your time and money to the nonprofit organizations that matter to you most. It’s so hard to say no. But you may still wonder: Could I have given more?
No matter what your level of income or socio-economic status everyone can give of themselves to benefit others. The only way to truly know if you’ve lived up to your philanthropic potential is to refer to your annual giving statement. Sadly though, if you’re like most people, you probably don’t have one. While your bank or your credit card company will send you a document every month to detail your spending habits and how much you owe there are no general accounting practices that will tell you in any meaningful way how much to give.
Just as conscientious wealth managers recommend an annual budget for personal savings and spending it’s also a good idea to plan how much you can contribute to charity. Apart from the tax deductions you’re eligible to receive you are also making a worthwhile investment in the peace and prosperity of the community in which you live. And just as we recommend the benefits of equity in our expenditures of time and energy its also important to aspire toward giving in balance. Here are a few tips:
Select and support causes that are important to you
With so much need in the world it’s impossible to support every charity that asks. But if you make a decision in advance you can be assured that you are helping those causes that you find most meaningful. You may want to end homeless, human trafficking or drug addiction. You might want to encourage medical research to find a cure for cancer. Maybe environmental protection is a high priority or perhaps adult literacy. Pick one area of focus or several, but remember your resources are limited. The fewer choices you make the deeper your impact. You don’t want to spread yourself too thin.
Support organizations that you trust
There are many institutions out there doing great work to help those in need. Some even serve a variety of different causes across many sectors of the community. The United Way of Dane County, for example, addresses the needs of families with small children to overcome poverty through both education and housing assistance. This organization supports several other charities like the Boys & Girls Club and the Second Harvest Food Bank.
The best efforts of trusted charitable organizations are clearly visible throughout a given community with strong partnerships with other comparable groups and liked-minded companies and businesses. These are typically the nonprofits that your friends and family members also support as volunteers and donors. And they most often have a positive track record of success.
Decide how much you want to give for the year
As a general rule most philanthropists contribute a percentage of their annual income. Find a figure that you’re comfortable with and start there (maybe 5 to 10 percent). Even if you think you don’t have enough money to make a donation anything you can give will make a big difference. Every month set that amount aside in your budget and allow the funds to accumulate in your checking or saving account. You can make several small contributions to a variety of charities throughout the year or a few larger donations to your favorite organizations around the holiday season.
Plan for emergency giving
Whether it’s a natural disaster or the sudden illness of a friend something unexpected will require your financial assistance. Maybe a new organization is getting started and you want to help or someone you know is running a 10K and they’re raising money for a cause you believe in. You can set aside a small portion of your charitable funds just in case. If at the end of the year it goes unspent, you can always roll it into one of your other planned contributions.
Evaluate your giving and plan for next year
This is probably where you might be right now. Take a look at all of your charitable contributions throughout the year and ask yourself a few basic questions:
- Did I meet all of my of contribution goals for the year?
- Am I confident that my money was well invested
- Are there any new organizations that I could support next year? Any I should drop?
- Can I give more?
Your giving statement is your answers to these questions. If there are indeed funds left over and you don’t feel that you’re likely to suffer without that new TV set or a dinner in a fancy restaurant or a Hawaiian vacation you may want to up your giving budget for next year. If you have seen to the your healthcare, your retirement and the welfare of your children and aging parents there may be room to give more. Once you’ve met your material needs of food, clothing and shelter everything else in life is pretty much optional. You can certainly make investments in a few luxuries that make you happy. A new mountain bike or a pair of expensive shoes might put a smile on your face, but there is a lot of satisfaction to be enjoyed through the safety and security of those around you. True wealth isn’t determined by how much you can spend or buy or even save, but rather how much you can give to benefit the lives of others.